This is probably the best analysis of corporate governance in a news paper, I read. The writer has brought into the point of dynastic hold in the corporate governance with solid examples.
Some valid questions have been raised on the appointment of Chairman, CEO, Directors either from promoters or family members certainly make us think the loop holes in the running as well as hiding check and balances in the corporate governance.
The appointment of co-promoter as the CEO by the Infosys's nomination committee is valid point to look into. Whether the renowned professor Krishna Palepu, a director in the Satyam Board, knew the financial fraud of Ramalinga Raju? The writer questioned the occupation of two director's post in the State Bank of India board by Prof. Monammed Salahuddin of Madhupur college, Jharkhand, and Dr. Deva Nand Balodia, free lance journalist, once held the Officer on Special Duty to CM of Uttarakhand, gives us the feeling that none of these two gentlemen had any relevant experience to occupy Director's post in corporate business.More instances have been disclosed like film actor Shahrukh Khan, film director Yash Chopra, and lyricist Javed Akhtar currently holding posts of director in Jet Airways board. legitimately one can ask how Suresh talwar, a leading lawyer can hold the post of director in 50 (Fifty) listed and unlisted companies?
Keeping in mind the legitimate numbers of directors in a company prescribed in corporate governance rules, the convincing question mark on Reliance ADAG companies like Reliance Capital, Reliance Communication, Reliance Natural Resources, and Adlabs, is more than acceptable to all of us. These Reliance companies have just five directors including the Chairman, whereas Andhra Bank has 19 (nineteen) members in its board. Isn't it something that give our eyes to blink at once?
From all these above examples can't we infer that corporate governance has been trimmed down to mere lip service. Promoters have taken it granted to form boards in any way they like, as they seem to exercise their confidence of manipulating any consequences.
Infosys Co-Chairman NR Narayan Murthy on confronting, did arrange a detailed answer from Claude Smadja, the then chairman of nomination committee on the appointment of Kris Gopalakrishnan as CEO.
Mr. Palepu himself sent the note, in which he defended himself that read as "During my tenure as a director in Satyam, I fulfilled my responsibilities fully and appropriately. I look forward to providing my complete cooperation to regulatory agencies as they investigate this matter.The actions of Raju, and his brother have caused Satyam, thousands of Satyam employees, customers and investors, and India enormous damage".
The Satyam saga has opened the pandora's box for us to smell foul in corporate' governance. Out of many companies, only a few can be named away from the ill governance. More and more we go down the list of ET 500 companies, we see a steep fall in the standard of corporate governance. Few more pointers for you to realize how the corporate governance is being carried out in India.
- More than 70% of ET 100 boards do not have women in their boards.
- Out of 2211 BSE listed companies that have filed data with the exchange have only 4.9% women
- More than 70% of ET 100 boards haven't split the Chairman and CEO posts.
- More than 80% of ET 100 boards still don't have lead independent directors in place.
- Hundreds of listed companies still have to comply with clause 49 norms.
- In BSE itself, there are 390 companies still to file data.